The airport industry was profitable overall in 2013, but notably, much of the profit was made by just a handful of airports, leaving the overwhelming majority operating in the red, reveals the latest report by the Airports Council International (ACI).
According to the council’s “Airport Economics Report,” global industry revenue posted year-over-year growth of 5.5% in 2013, reaching US$131 billion.
“In the face of the ongoing uncertainties in the global economy, global airport revenues remained resilient through the downside risks that have persisted across the world’s markets,” said Angela Gittens, director general of ACI World.
“Airport revenues experienced sound growth rates in 2013 compared to the previous year. Although there are some regional disparities, growth in key emerging market airports has circumvented the slowdown in the Euro area and other mature markets,” Gittens added.
The industry as a whole experienced a return on invested capital of 6.3%, but global airport profitability does not yield a detailed picture of the industry’s health, said Dr. Rafael Echevarne, director of economics and program development of ACI World. He pointed out that only those airports with millions in passenger numbers annually post gains, while the smaller airports are turning out losses.
According to the report, over 80% of the world’s airports have fewer than 1 million passengers each year. “Therefore, the airport industry faces a conundrum,” Echevarne added.
“Although the airport industry as a whole is profitable, most airports are actually in the red on their financial statements,”‘ he continued. “The latest estimates suggest that as many as 69% of airports worldwide operate at a net loss. Most of these airports have fewer than one million passengers per annum. Smaller airports have neither sufficient traffic to achieve economies of scale nor to generate significant aeronautical or non-aeronautical revenue.”
The report said passenger growth remains strong and even air cargo has managed to make a recovery.
Said Gittens: “International tourism, in particular, was irrepressible in 2014 considering the geopolitical risks that have persisted in certain parts of the world such as Eastern Europe and the Middle East as well as the Ebola outbreak. By and large, the international traveller in 2014 appears to have withstood the challenges.
“As well, air cargo rebounded after almost three years of growth stagnation whereas passenger traffic continues to post growth in the realm of 5% year after year following the Great Recession.”
Photo: Portal da Copa/ME
